Suckling recovering

Press, 26 May 1979, Page 19

Suckling recovering

The directors of Suckling Industries, Ltd, are taking active steps to restore profitability to that prevailing tjetore the Norvic/Suckling Bierger two years ago. the chairman (Mr \V. A. Hadlee) says in the annual report. • In spite of the downturn of the first half, the year’s profit recovered to $409,417 — an increase on an annual basis of 39 per cent on the previous year, but still short of the combined profit be(pre the merger. ..“It is not possible, under today’s rapidh changing conditions to predict the likely course of our future trading. “The recently-implemented rise in power charges, of over 40 per cent, and the bewildering increase in the price of our basic raw materia! — leather — in recent months are two examples of factors which overnight can upset al! forecasts. “We can, however, advise shareholders that the present forward-order position of our manufacturing units is much more satisfactory then was the case at this time last year.” Mr Hadlee says.

| Tne Group’s importing > division has completed its i first year of operations as a i separate entity, and a satisfactory result was achieved. “We have actively-sought ' export opportunities and are i currently engaged in negotiations which could mate- | rially increase our export (potential,” Mr Hadlee says. “During the first half of the year under review, our group of companies experienced the full impact of the worst economic down turn that New Zealand has known for many years,” he Isays. ■ “Costs were generally’ well (Contained, but the constant | increases in many items, (particularly energy charges and interest rates, are disturbing for ail manufacI turers.

“The board sees the continuing double-figure inflation rate having a most damaging effect on both New Zealand’ internal economy, and our ability to compete on overseas markets. •

■ “The group is placing I strong emphasis on greater (market penetratin, because the combined effects of a continually falling birthrate over the past few years, and high net migration figures, have resulted in a reduced domestic demand for most types of footwear,” savs Mr Hadlee. The profit was after providing $112,582 more for tax i at $327,832. $10,315 more for interest on fixed term loans at $83,494 and $37,305 less for depreciation at $167,472. The 14 per cent dividend for the year takes $140,000. (the same amount, as appro-, nriated for the 14-months period last year. It is covered 2.9 times. The earning rate on average shareholders’ funds is 9.8 per cent. Net current assets increased $154,342 to $2,952,624; the current ratio is 3.3:1. Shareholders’ equity is 68.8 per cent; the funds of 4.3 M are comprised of SIM ordinary capital, SI.6M capital reserves, and SI.7M revenue reserves. The shares last sold at 155 c for a dividend yield of 9.0 per cent and an earnings

yield of 26.4 per cent. The price-earnings ratio is 3.8, and the net asset backing 431 c a 100 c share.